None of us can predict the future, and the possibility of being unable to manage our own financial affairs or make decisions regarding our healthcare due to illness or incapacity is a reality we must face. While it’s natural to feel a sense of discomfort when confronting such uncertainties, having a well-planned estate strategy in place is essential for ensuring that our best interests are safeguarded in such unforeseen circumstances. A crucial component of estate planning – often overlooked – is the Lasting Power of Attorney (LPA), which offers you this very peace of mind.
An LPA is a legal document that allows you to appoint a trusted individual to make decisions on your behalf when you are unable to do so yourself, either due to incapacity or illness. By proactively setting up an LPA, you gain the reassurance that someone you trust will have the legal authority to manage your financial and personal affairs if the need arises, ensuring your resources are used in your best interests.
There are two main types of LPAs: Property and Financial Affairs LPA, which covers decisions concerning your property and financial matters, and Health and Welfare LPA, which pertains to decisions about your medical care and daily living needs. Both types of LPAs complement each other and form an essential aspect of a well-rounded estate plan.
In this comprehensive guide, we will further explore the benefits and intricacies of Lasting Power of Attorney, shedding light on its importance within the realm of estate planning, and how it can provide invaluable peace of mind during uncertain times. By understanding the fundamentals of LPA, you will be better prepared to face life’s challenges with certainty and resilience.
1. Understanding the Two Types of Lasting Power of Attorney
Before delving into the process of setting up an LPA, it is crucial to understand the two primary types of Lasting Power of Attorney and how they differ:
– Property and Financial Affairs LPA: This LPA grants your chosen attorney the authority to make decisions associated with your finances and property. They will be responsible for managing your bank accounts, paying bills, collecting your income, selling or renting out your property, and otherwise handling your financial and property affairs in your best interests.
– Health and Welfare LPA: This LPA allows your appointed attorney to make decisions regarding your healthcare and personal welfare. Their responsibilities would include making decisions about medical treatments, where you live, your daily care and routines, and even life-sustaining treatments if you have given explicit permission for this.
As both types of LPAs serve different yet equally vital functions, it is advisable to consider establishing both as part of your estate planning strategy.
2. Choosing the Right Attorney: Factors to Consider
Selecting the right person to act as your attorney is an essential step in the LPA process. Here are some factors to consider when making this vital decision:
– Trustworthiness: Your attorney should be someone you trust implicitly to make decisions in your best interests, even during difficult circumstances.
– Willingness and Ability: Ensure that the person you choose is willing and capable of taking on the responsibilities of an attorney.
– Relationship Dynamics: Consider how well your chosen attorney gets along with other family members, friends, or professionals involved in your care or financial management.
– Financial Knowledge and Expertise: For a Property and Financial Affairs LPA, it is beneficial to appoint someone with a strong grasp of financial matters.
3. Setting Up a Lasting Power of Attorney: The Process
Once you have decided on the type(s) of LPA and chosen your attorney(s), the next step is to follow the established process:
– Complete the Relevant Forms: Fill out the appropriate LPA forms for the type(s) of LPA you wish to create. Forms are available from the Office of the Public Guardian (OPG) website and can be completed online or offline.
– Provide Signatures: Both the donor (you) and the attorney(s) need to sign the LPA forms, confirming their respective roles and agreement to the LPA.
– Obtain Certificate Provider’s Signature: An independent person, known as the Certificate Provider, must also sign the LPA forms, confirming that you understand the purpose of the LPA and are not being coerced into signing.
– Register the LPA: Finally, submit the completed LPA forms to the OPG for registration. The registration fees currently stand at £82 per LPA.
Bear in mind that registering an LPA can take up to 12 weeks. It’s therefore invaluable to be proactive and establish an LPA sooner rather than later.
4. Safeguards and Revoking an LPA
As granting a lasting power of attorney effectively relinquishes a level of control over your affairs, it is essential to understand the safeguards in place:
– You can specify preferences or instructions within the LPA to guide your attorney’s decision-making.
– An LPA must be registered with the OPG before it can be used, ensuring proper oversight.
– You have the freedom to revoke an LPA, provided you have the mental capacity to do so.
Conclusion
By understanding the vital role that Lasting Power of Attorney plays in estate planning, you can take proactive steps to prepare for life’s uncertainties, ensuring that your best interests are protected when you need it most.
Our team of experienced professionals at Sovereign Planning is on hand to guide you through the process of creating a lasting power of attorney and addressing any concerns or questions you may have. Contact us today to discuss how we can support you in safeguarding your future with confidence and peace of mind.
